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7. Suppose that I want to have $700,000 in todays dollars in my newly opened IRA when I retire in 36 years. Assume that my
7. Suppose that I want to have $700,000 in todays dollars in my newly opened IRA when I retire in 36 years. Assume that my investments earn 9.3% and that inflation averages 3.5%.
a. What is the actual future value I need in order to achieve my goal?
b. How much should I deposit each year in order to reach this goal? Assume that I want to contribute the same amount of actual dollars each year; I do not intend to increase the contributions to keep pace with inflation.
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